Rapid changes in the organization of health care delivery and finance in the U.S. raised growing concerns about the adequacy of health data systems for making public policy decisions. Issues include not only the appropriateness and completeness of existing data for evaluating key policy questions (e.g. the impact of managed care on cost and access), but the future viability of data systems. The existing data systems have developed largely on an ad hoc basis. In this research we will focus on strategies for improving the quality of provider data, particularly as it relates to physicians and hospitals. Drawing on recent advances in management strategy, the premise of this research is that activity based "value chain" analysis of the value-added in the production process offers a useful conceptual framework for considering improvements in the design of health care data systems. Research has two components: 1) development of a methodological framework for applying value chain analysis to health care; 2) a small pilot study using this methodology to explore its potential feasibility and robustness. We will draw on economic and management strategy models to consider not only the feasibility of implementing the framework under the existing institutional structure of the industry, but also to assess the direction of changes in organizational activities and boundaries and evaluate implications for future data collection. The specific aims of this research are: 1) To critique the existing health care data system from the perspective of a value chain approach. 2) To develop a methodological framework for applying a value chain approach to health care data collection focusing on hospitals and physicians. 3) To perform a small pilot study applying this value chain methodology. 4) assess the potential feasibility and robustness of this methodology and consider possible lessons from our analysis for improving the design of health data collection system.